Discussion Draft. Memo APPENDIX E. RE: Roosevelt Development Feasibility Study

Memo Date: January 4, 2015 To: Sound Transit C/o Jeff Lehman, KPFF From: Blair Howe, CCIM Michael George, LEED AP RE: Roosevelt Development Feasibility Study Purpose of the Assignment The purpose of the assignment is to assess the financial feasibility of multi-family development scenarios for Sound Transit's Roosevelt Station property. Findings The highest and best use for the property, at this time, is for apartment development and the results of financial feasibility analysis suggest development is financially feasible. During the past few years demand for new housing in the City of Seattle has been strong and developers have responded by adding an unprecedented amount of new apartment inventory to the market. In 2015, for the first time in years, the opening of new apartment units created a subtle softening in the market. During 2016 over 2,300 units will be opening and employment growth is expected to be moderate. Many market participants believe that given the areas long-term population and employment growth, the current market expansion will continue. Real estate markets are cyclical in nature and market behavior is challenging to predict. How the next few years play out is unclear and caution is advised. Three development scenarios for the property have been prepared; Apartments, Apartments and Hotel, Apartments and Grocery. The financial feasibility analysis for these development scenarios suggests the following: The Apartment Scenario is currently financially feasible. The Apartments and Hotel Scenario is currently financially feasible, however, the market for hotels in the neighborhood is not deep. The Apartments and Grocery Scenario is financially feasible. Methodology The financial feasibility analysis is based on information contained in the following documents, augmented by additional research and analysis: Draft Existing Conditions Summary Report prepared by KPFF, dated September 16, 2015 Page 1

Draft Roosevelt Market Report, prepared by Kidder Mathews, dated October 5, 2015 6600 Roosevelt TOD Analysis, Prepared by VIA, dated December 4, 2015 Context The financial feasibility analysis is intended to provide perspective about how a development might look based on current market conditions, with the understanding that actual development proposals will likely differ from the presented scenarios. The assumptions used are consistent with current real estate conditions. It is important to emphasize that development today is being planned with "top of the market" assumptions. At times like this, conservative investors become cautious, keeping a close eye on changes in the economy. Global Assumptions 1. The property is sold by Sound Transit (ST). 2. The sale takes place upon issuance of building permits. 3. ST performs its internal review processes in accordance with the schedule presented below. If the scenarios are modified to create deeply subsidized multi-family housing units, the schedule may need to be modified. 4. Apartment rental concessions, equal to one month s free rent, are applied to the market rate apartment units. 5. Permanent Financing Cost of Funds: 4.5% 6. Growth Rate (for construction costs, rent, and operating expenses are at the inflation rate): 2.5% 7. Holding period: 10 Years from the date the purchase and sale agreement is executed. 8. Overall Capitalization Rate: 4.5% 9. Residential Parking Revenue: $125 per space per month 10. Retail Rent: $27.00/sf/triple net 11. Shared parking analysis has not been completed. 12. The City of Seattle s MFTE program is utilized. The calculated sale price does not account for expiration of the MFTE. 13. All inputs are based on current market conditions (un-trended). Sensitivity analysis is used to assess influence of changes in the market on project performance. Performance Measures To assess project feasibility the scenarios are measured against the following market indicators. Stabilized Return on Cost = 6% to 6.5% Internal Rates of Return over 10 Year Holding Period (Unleveraged) = 6% to 9% Page 2

Property Description Sound Transit's Roosevelt properties are bounded by NE 66h Street, NE 67th Street, Roosevelt Way NE and 12th Avenue NE in the Roosevelt neighborhood s commercial core. The agency s holdings consist of three distinct development sites, the Main, North and South Sites. The Sites are rectangular and slope slightly upward from south to north. This analysis assumes that Sound Transit will vacate the Sites 24 months prior to the commencement of transit service. The table below shows the characteristics of each site. Parcel Area (SF) Dimensions Zoning Main 53,000 204 Ft (N-S) x 260 Ft (E-W) NC3P-85 (5.75) North 6,100 102 Ft (N-S) x 60 Ft (E-W) NC3P-65 (2.0-5.75) South 5,300 102 Ft (N-S) x 52 Ft (E-W) NC3P-85 (2.0-5.75) Highest and Best Use The definition of the highest and best use of a property is the reasonably probable use of property that is, legally permissible, physically possible, financially feasible, and is maximally productive. Legally Permissible The City of Seattle zoning code summarizes the intent of NC3 with the P designation as follows: Neighborhood Commercial 3 is a larger pedestrian-oriented shopping district serving the surrounding neighborhood and a larger community, citywide or regional clientele; allowing comparison shopping among a range of retail businesses. Typical land uses include supermarkets, restaurants, offices, hotels, clothing shops, business support services, and residences that are compatible with the area s mixed-use character. Building types are single purpose commercial structures office buildings, multi-story mixed-use and residential structures. Nonresidential uses typically occupy the street front. Street-level use transparency is required for 60% of a street-facing facade. Nonresidential uses at street level must have an average depth of 30 and a minimum height of 13. Street-level non-residential design must contain at least one visually prominent pedestrian entry for residential uses. Dwelling units must be at least 4 above, or 10 back, from a sidewalk, unless conversion of a nonresidential space to a residential use is authorized. There is no maximum size of most commercial uses; 25,000 square feet for wholesaling, light manufacturing and warehouse uses. Parking must be located at the rear or side of a building, within a structure, or off-site within 800. Parking between a building and a street is not allowed. Parking between buildings along the street is limited to 60. Within a structure, street level parking must be separated from the facade by another permitted use. Parking access must be from the alley if feasible and curbcuts are to be limited. Parking quantity depends on land use and location. No minimum parking is required in Urban Centers, and portions of Urban Villages with frequent transit service within 1/4 mile. Pedestrian-designated zones (P) apply to pedestrian-oriented commercial streets. The P designation preserves and encourages an intensely pedestrian-oriented, retail shopping district where non-auto modes of transportation, both to and within the district, are strongly favored. Street-level Page 3

uses are limited to pedestrian-oriented nonresidential uses that have the potential to animate the sidewalk environment, such as retail, entertainment, restaurants, and personal services. Drive-in or drive-thru businesses are prohibited. Parking quantity depends on land use and location. No parking is required for the first 4,000 to 5,000 square feet of retail businesses. Or, no minimum parking may be required in Urban Centers, and portions of Urban Villages with frequent transit service within 1/4 mile. Surface parking is prohibited adjacent to principal pedestrian streets. Parking access must be from alley or side-streets, if feasible, otherwise a two-way curbcut on the principal pedestrian street is allowed. The allowable FAR for the Main Site is 5.75 (NC3P-85). For the North (NC3P-65) and South (NC3P-85) Sites the allowable FAR ranges from 2.0 for a single-use building to 5.75 for a mixed-use building. Physically Possible The 6600 Roosevelt TOD Analysis, Prepared by VIA, dated December 4, 2015 shows the Main Site s development capacity. The work is based on the recommendations of the Draft Roosevelt Market Report, prepared by Kidder Mathews, dated October 5, 2015. VIA s development scenario work indicates that the Main Site can reasonably accommodate a residential project measuring just over 240,000 gross square feet or an achievable FAR of 4.5. According the zoning code, for stand-alone commercial buildings the allowable square footage is 106,000 square feet, based on the base FAR of 2.0. While physical feasibility analysis has not been completed for the North and the South Sites, an FAR analysis can provide some perspective. The North site measures 6,100 square feet and carries a maximum FAR of 5.75 for mixed-use buildings; that translates to a building envelop of 35,075 square feet. The same calculation for the 5,300 square foot South site results in a 30,475 square foot building envelope. Just how usable the small sites are, when adjustments are made for setbacks and adjoining buildings, is to be determined. However, it does appear to be physically possible to build apartments units with ground floor commercial uses on the small sites. Financially Feasible To be financially feasible, a development must generate adequate revenue to justify the cost of construction, plus a profit for the developer. Preliminary feasibility work presented in Kidder Mathew s Draft Roosevelt Market Report, dated October 5, 2015, indicates that currently demand exists for apartments, both market rate and income restricted, retail, hotel, and urgent/quick care and community medical clinics. The preliminary feasibility work suggests that apartments and hotel may be financially feasible. The financial feasibility of three development scenarios is tested on the following pages. The analysis suggests, based on the conceptual design work, that development is feasible under current market conditions. Maximally Productive The maximally productive use of the Main Site is that use that produces the highest residual land value. There is currently demand in the multifamily development sites; however, the market may at the point of inflection. Some market participants are concerned about oversupply while others think there is demand to support additional space. At this time maximally productive for the site is for rental apartments. If the market for multi-family were to soften, other uses, such as medical office or hotel may prove maximally productive. Page 4

Disposition and Development Schedule The schedule, presented in the Gantt chart below, applies to all of the development scenarios discussed on the following pages. It assumes that there is a public outreach process that takes place during the March of 2016 and that by May an RFP for the property disposition is issued. By December of 2016 the Sound Transit Board approves the selected developer(s). The City of Seattle land use approval process takes approximately 18 months with permit issuance in June 2018. Construction takes an additional 18 months with completion and initial occupancy in June of 2020, and leased up completed by the end of June 2021. Page 5

Apartment Development Scenario Development Program 1. Gross Building Area - 360,770gsf 2. Unit Count - 280 3. Units Per Acre - 230 4. Stories - 7 5. Apartment Parking Spaces - 313 6. Apartment Parking Ratio -.99 /unit 7. Retail Area - 11,510 8. Retail Parking Ratio 3.1/1000 Analysis The analysis is intended to provide perspective on the sources and uses of funds, nature of cash flows, and project performance. The Apartment Development Scenario Analysis highlights are presented below and the detailed report is attached. The transaction structure is basic. Sound Transit sells it property to a for-profit developer under the condition that certain TOD objectives are achieved. The developer permits, finances, constructs and operates the project. The land sale takes place when the developer has achieved certain design and permitting milestones culminating in the issuance of building permits. Key Assumptions: 1. Market Rental Rate $2.66/sf/month (Includes adjustment for concessions) 2. MFTE Rental Rent - $1.97/sf/month 3. Residential Lease Up Period 12 months Financial Highlights 4. Unit Absorption 23 units per month Development Costs: Findings The cost to complete the project is $91.5 million. If sold upon stabilization, its value is $114.9 million. The analysis indicates that the development scenario is feasible and will generate returns adequate to attract investors. The financial highlights of the project are shown in the table. Land $14,575,000 Hard Costs $61,797,039 Soft Costs $9,906,879 Interest Carry $5,173,930 $91,452,848 Stabilized Value: $114,886,699 Returns at Stabilization: Return on Cost (NOI/Cost) 6.0% IRR before Debt 11.5% Return through Holding Period - 10 Years IRR before Debt 9.4% Page 6

Risk Monte Carlo Simulation is used to measure the effect on project performance when changing certain assumptions. It provides perspective about the outcome of the analysis when market conditions change, as inevitably happens. Apartment Development Scenario Risk Analysis The graph shows the variability in the results when five variables change, capitalization rate, hard costs, permanent loan costs, market rate apartment rent, and operating expenses. The analysis suggests that the Leveraged Internal Rate of Return (IRR), over the holding period, could range from between 3% and almost 32%. The average IRR is 19.1%. The analysis indicates that the development opportunity has a moderate risk/reward profile. Page 7

Apartments and Hotel Scenario Development Program 1. Gross Building Area 353,420gsf 2. Stories 7 3. Residential Unit Count 148 4. Residential Parking Ratio 1 space/unit 5. Hotel Room Count 160 6. Hotel Parking Ratio -.75 spaces/room 7. Retail Area 9,350 8. Retail Parking Ratio 3.1 spaces/1,000sf 9. Total Parking Count - 307 Analysis The financial analysis reflects the findings of the conceptual massing work. It is intended to be preliminary in nature. Further refinement, based on preliminary designs, is needed to improve the accuracy of the analysis. The analysis is intended to provide perspective on the sources and uses of funds, nature of cash flows, and project performance. The Apartments and Hotel Development Scenario Analysis highlights are presented below and the detailed report is attached. The transaction structure is basic. Sound Transit sells it property to a for-profit developer under the condition that certain TOD objectives are achieved. The developer permits, finances, constructs and operates the project. The land sale takes place when the developer has achieved certain design and permitting milestones culminating in the issuance of building permits. Key Assumptions: 1. Market Rate Apartment Rental Rate $2.66/sf/month 2. MFTE Rental Rent - $1.99/sf/month 3. Lease up period 12 months 4. Residential Unit Absorption 12 units per mos. Findings The cost to complete the project is $93.7 million. If sold upon stabilization it value is $100.2 million. The analysis indicates that the development scenario is feasible and will generate returns adequate to attract investors. The financial highlights of the project are shown in the table. Development Costs: Financial Highlights Land $14,575,000 Hard Costs $60,338,095 Soft Costs $9,510,619 Interest Carry $5,785,636 $93,729,350 Stabilized Value: $100,289,469 Returns at Stabilization: Return on Cost (NOI/Cost) 6.8% IRR before Debt 7.0% Return through Holding Period - 10 Years IRR before Debt 8.0% Page 8

Risk Monte Carlo Simulation is used to measure effect on project performance when changing certain assumptions. It provides perspective about the outcome of the analysis when market conditions change, as inevitably happens. Apartment & Hotel Development Scenario Risk Analysis The graph shows the variability in the results when five variables change; capitalization rate, hard costs, permanent loan interest rate, market rate apartment rent, and operating expenses. The analysis suggests that the Leveraged Internal Rate of Return (IRR), over the holding period, could range from between 0% and almost 30%. The average IRR is 16.8%. The analysis indicates that the development opportunity has a moderate risk/reward profile. Page 9

Apartments and Grocery Scenario Development Program 1. Gross Building Area 365,540gsf 2. Market Rate Apartment Unit Count - 246 3. Apartment Parking Ratio -.96/unit 4. Retail Area 26,600sf 5. Retail Parking Ratio 3.1/1,1000sf 6. Stories - 7 7. Total Parking Count 319 Analysis The analysis of the Apartments and Grocery Scenario highlights are presented below and the detailed report is attached. The transaction structure is basic. Sound Transit sells it property to a for-profit developer under the condition that certain TOD objectives are achieved. The developer permits, finances, constructs and operates the project. The land sale takes place when the developer has achieved certain design and permitting milestones culminating in the issuance of building permits. Key Assumptions: 1. Market Rental Rate - $2.66/sf/month 2. MFTE Rental Rate - $1.97/sf/month 3. Residential lease up period 12 months 4. Residential Unit Absorption 20 units per month Findings The cost to complete the project is $93.1 million. The overall value at stabilization it value is $114.8 million. The analysis indicates that the development scenario is and will generate returns adequate to attract investors. The financial highlights of the project are shown in the table. Development Costs: Financial Highlights Land $14,575,000 Hard Costs $63,229,363 Soft Costs $10,290,990 Interest Carry $5,013,117 $93,108,470 Stabilized Value: $114,786,928 Returns at Stabilization: Return on Cost (NOI/Cost) 5.8% IRR before Debt 10.9% Return through Holding Period - 10 Years IRR before Debt 9.1% Page 10

Risk The graph shows the variability in the results when five variables change; capitalization rate, hard costs, permanent loan interest rate, market rate apartment rent, and operating expenses. The analysis suggests that the Leveraged Internal Rate of Return (IRR), over the holding period, could range from between 0% and 30%. The average IRR is 15%. The analysis indicates that the development opportunity has a moderate risk/reward profile. Apartments and Grocery Development Scenario Risk Analysis Page 11

Demand for Development Sites As of this writing the demand for large development sites in Seattle's close-in neighborhoods remains strong, particularly in walkable neighborhoods with good transit service like Roosevelt. Income Restricted Housing Considerations There is demand for all levels of income-restricted housing in the Roosevelt neighborhood. If Sound Transit is to pursue affordable housing opportunities for its Roosevelt property the following factors are worth consideration: 1. Income Restricted Apartments and Transit Ridership. While the supporting data is limited, it is commonly thought that certain groups that occupy income-restricted apartment units generate more transit ridership than the occupants of market rate units. As each project is unique, the role of ridership in the income restricted housing discussion warrants consideration. 2. Income Restriction Targets. The type of group served by income restricted housing has an influence on the projects Sound Transit pursues. Does Sound Transit have a preference for workforce housing, homeless housing, housing for the disabled, families, singles, or some other group? At what level of affordability? What unit configurations and sizes are acceptable? These are questions that can guide a projects direction. Conversations and upfront commitments from affordable housing funding partners can provide perspective. Open competition that involves a number of income restricted housing provides a different kind of perspective. 3. Sound Transit Subsidies. Does Sound Transit provide direct income restricted housing subsidies to support a project? Does the agency provide cash subsidies; contribute its land, or some other form of subsidy? Are there FTA or other constraints that influence this decision? 4. Location Considerations. A dollar invested in income restricted housing in one location can result in more units created than in another location. In locations with high cost land, more of the subsidy goes to purchase land rather than to off-set construction costs. The result is that funds invested can be used to create more affordable units where land value is less of a factor. In addition, in dense downtown locations where high-rise steel and concrete buildings are the norm, the cost to create income-restricted units becomes prohibitive. The discussion contained in Kidder Mathews First Hill report, prepared for Transit in December of 2105 provides additional perspective. As a project partner, the agency could choose to participate at a variety of levels ranging from a hands-off approach whereby it sells its land with income restriction requirements, to an approach that makes ST a long-term partner/owner; by leasing its land or making financial contributions to the project in cooperation with other funders. The following is a preliminary summary of some, but not all of the strategies ST could pursue to create income-restricted housing on its properties. The discussion does not address all of the detail, nuances, combinations of approaches, but rather focuses on the general economic considerations and implementation strategies. Additional funding programs are described in the Affordable Rental Housing section of Kidder Mathews Roosevelt Apartment Market Report prepared for Sound Transit in August 2015. Page 12

1. Multi-Family Property Tax Exemption Given the significant tax abatement generated by Seattle s MFTE program, all the three Roosevelt scenarios assume that the developer will take advantage of this program. This program is designed to create workforce housing that serves households with incomes ranging from 65% to 90% of AMI. The program requires that at least 20% of a project s total units are income restricted for 12 years. Using the 280 unit Apartment Development Scenario as a model, the MFTE program would create 56 workforce housing units. The MFTE Table to the right shows the program's income-restriction requirements by unit type. For the purpose of this work it is assumed that the average MFTE unit is restricted to 75% of AMI. 2. 4% Housing Tax Credits City of Seattle MFTE Program Unit Type Income-Restriction Efficiency 40% of AMI Studio 65% of AMI 1BR 75% of AMI 2BR 85% of AMI 3+BR 90% of AMI The 4% Housing Tax Credit program is administered by the Washington State Housing Finance Commission (Commission). For projects to qualify for the program, more than 50% of a project must be financed with tax-exempt Multifamily Bonds. Additionally, the project owner must allocate at least 20% of the units to households within incomes at or below 50% of AMI or 40% of the units to households at or below 60% of AMI. A project may then access the 4% Low Income Housing Tax Credit (LIHTC) without competing for an allocation. Using bonds with tax credits allows developers to combine low interest rates on long term debt with a substantial equity contribution from an allocation of Low Income Housing Tax Credits (LIHTC). While LIHTC cannot be used with 501(c)(3) bonds, nonprofit developers can access LIHTC by forming a partnership with a forprofit tax credit investor and applying for Multifamily Bonds. Currently, the Commission s supply of private activity Bonds exceeds demand. Therefore, applications for the Tax Credit/Bond program may be submitted at any time during the year, 75 to 90 days before the anticipated the tax-exempt bond closing. Applications received by the third Friday of a given month will be eligible to proceed to a public hearing at the following month s Commission meeting. A project may target a range of income restriction levels, target groups, and amenities. Using the 280 unit Apartment Roosevelt Scenario as a model, the program could create 112 units of housing if the units were restricted to 60% AMI. The advantage of the 4% Tax Credit program is its speed to market and relative ease of execution, when compared to the 9% program discussed below. 3. 9% Housing Tax Credits The Washington State Housing Finance Commission's (Commission) 9% Low-Income Housing Tax Credit Program (LIHTC) allocates federal income tax credits to developers to encourage the construction and rehabilitation of affordable multifamily housing. Housing credit in the 9% Program is allocated through an annual competitive process in which projects are evaluated and scored according to the Commission s established criteria. To qualify for these tax credits a project owner must meet the 4% tax credit income restrictions described above and commit to 40% of the Page 13

total low-income housing units for households at or below 30% of the AMI, and 30% of the total low-income housing units for households at or below 40% of the AM. Because of the highly competitive nature of the program, projects often target lower income levels than the basic requirements. Projects that quality 9% Housing Tax Credits are typically funded by a multitude of funding sources combined to make a project feasible. For projects located in the City of Seattle, the City's Office of Housing, which administers Affordable Housing Levy funds, is the prime source of subsidy. The Office of Housing s competitive process for funds considers a number of factors including, but not limited to, the availability of Tax Credits, the availability of Levy funds, the groups served, and the location of the project. An apartment project that qualifies for the 9% Tax Credit program typically, because of limited funding availability, is sized 60 to 120 units. Many projects also target specific populations such as the homeless or people with disabilities. Page 14

Attachments Apartment Scenario Financial Analysis Apartment and Hotel Scenario Financial Analysis Apartment and Grocery Scenario Financial Analysis Reference Documents Draft Existing Conditions Summary Report prepared by KPFF, dated September 16, 2015 Draft Roosevelt Market Report, prepared by Kidder Mathews, dated October 5, 2015 6600 Roosevelt TOD Analysis, Prepared by VIA, dated December 4, 2015 Nature of the Assignment The information supplied herein is from sources we deem reliable. It is provided without any representation, warranty or guarantee, expressed or implied as to its accuracy. Prospective Owner, Buyer or Tenant should conduct an independent investigation and verification of all matters deemed to be material, including, but not limited to, statements of value, income, and expenses. Page 15

Roosevelt Apartments Project Proforma December 30, 2015 Prepared for: Sound Transit c/o KPFF 1601 Fifth Avenue, Suite 1600 Seattle, WA 98101 Prepared by: Blair Howe, CCIM Michael George, LEED AP Kidder Mathews bhowe@kiddermathews.com (206) 963-0894 The information supplied herein is from sources we deem reliable. It is provided without any representation, warranty or guarantee, expressed or implied as to its accuracy. Prospective Investors, Buyers or Tenants should conduct an independent investigation and verification of all matters deemed to be material, including, but not limited to, statements of income and expenses. CONSULT YOUR ATTORNEY, ACCOUNTANT, OR OTHER PROFESSIONAL ADVISOR. 1

ID Task Name Duration Start Finish 1 Solicitation 229 days Tue 8/15/17 Fri 6/29/18 Roosevelt Development Schedule 2017 2018 2019 2020 2021 2022 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 2 Publc Outreach 44 days Tue 8/15/17 Fri 10/13/17 3 Issue RFP 23 days Mon 10/16/17 Wed 11/15/17 4 Proposals Due 43 days Thu 11/16/17 Mon 1/15/18 5 Staff Review 33 days Tue 1/16/18 Thu 3/1/18 6 Dev. Selection 21 days Fri 3/2/18 Fri 3/30/18 7 Negotiate PSA 43 days Mon 4/2/18 Wed 5/30/18 8 ST Board Approval 22 days Thu 5/31/18 Fri 6/29/18 9 Land Use/Building Permit Approval 392 days Mon 7/2/18 Tue 12/31/19 10 Construction 391 days Wed 1/1/20 Wed 6/30/21 11 Lease up 261 days Thu 7/1/21 Thu 6/30/22 Project: CC Twonhouse Date: Thu 12/31/15 Task Split Progress Milestone Summary Project Summary External Tasks External Milestone Deadline Page 1 2

Analysis Assumptions Report Roosevelt Apartments Investment Assumptions Price of Property None Date of Acquisition 1 June 2018 Holding Period 10 Years Inflation Rate 2.5% per Year Sale Price Method 4.5% Capitalization of Last Year's NOI Selling Costs 1.25% Group Member's Assumptions General Vacancy & Credit Loss Present Value Discount Rate Before Debt Present Value Discount Rate Before Tax Zero Zero Zero Group Assumptions Total Initial Investment $19,000,000.00 Working Capital Minimum $100,000.00 Working Capital Maximum $100,000.00 Working Capital Interest Rate Zero Managing Member Loan Interest Rate 0% per Year Number of Units Issued 1 Cash Distribution Pattern Yearly in January Distribution Assumptions Cash Distribution Start Date 1 August 2022 Preferred Return to Members None Cash to Members 100% Net Taxable Income to Members 100% Investment Return to Members 100% of Investment Sale Proceeds to Members 100% Investment Tax Credit to Members 100% Land Development Spending Assumptions Development Cost (53,000 SqFt @ $275.00/SqFt) $14,575,000.00 Include in Draws Zero Expenditure Start 1 January 2020 1 Month Hard Cost Above Grade Development Spending Assumptions Development Cost (241,470 SqFt @ $188.34/SqFt) $45,478,459.80 Include in Draws 95% Expenditure Start 1 January 2020 18 Months 3

Analysis Assumptions Report Roosevelt Apartments Hard Cost Below Grade Development Spending Assumptions Development Cost (119,300 SqFt @ $98.55/SqFt) $11,757,015.00 Include in Draws 95% Expenditure Start 1 January 2020 18 Months Hard Cost Courtyard Development Spending Assumptions Development Cost $547,500.00 Include in Draws 95% Expenditure Start 1 January 2020 18 Months Retail Tenant Improvements Development Spending Assumptions Development Cost (11,510 SqFt @ $93.08/SqFt) $1,071,350.80 Include in Draws 95% Expenditure Start 1 January 2020 18 Months Hard Cost Contingency Development Spending Assumptions Development Cost $2,942,713.00 Include in Draws 95% Expenditure Start 1 June 2021 1 Month A&E Development Spending Assumptions Development Cost $4,347,575.00 Include in Draws 90% Expenditure Start 1 July 2018 36 Months Specialty Consultants Development Spending Assumptions Development Cost $305,000.00 Include in Draws 90% Expenditure Start 1 July 2018 36 Months Testing & Inspections Development Spending Assumptions Development Cost $150,000.00 Include in Draws 90% Expenditure Start 1 January 2020 18 Months 4

Analysis Assumptions Report Roosevelt Apartments Legal Development Spending Assumptions Development Cost $20,000.00 Include in Draws 90% Expenditure Start 1 July 2018 36 Months Off-Sites & Permits Fees Development Spending Assumptions Development Cost $500,000.00 Include in Draws 90% Expenditure Start 1 July 2018 36 Months Lender Legal, Review, Draw Development Spending Assumptions Development Cost $69,000.00 Include in Draws 90% Expenditure Start 1 January 2020 18 Months Marketing Coll, FF&E, LeaseUp Development Spending Assumptions Development Cost $600,000.00 Include in Draws 90% Expenditure Start 1 March 2021 15 Months Lease Commission Development Spending Assumptions Development Cost $186,462.00 Include in Draws 90% Expenditure Start 1 June 2021 12 Months Prop. Tax During Construction Development Spending Assumptions Development Cost $556,271.00 Include in Draws 90% Expenditure Start 1 January 2020 18 Months Builder's Risk Insurance Development Spending Assumptions Development Cost $196,375.00 Include in Draws 90% Expenditure Start 1 January 2020 18 Months 5

Analysis Assumptions Report Roosevelt Apartments Constructioin Management Fee Development Spending Assumptions Development Cost $396,000.00 Include in Draws 90% Expenditure Start 1 January 2020 18 Months Development Fee Development Spending Assumptions Development Cost $2,108,440.00 Include in Draws 90% Expenditure Start 1 June 2021 1 Month Soft Cost Contigency Development Spending Assumptions Development Cost $471,756.00 Include in Draws 90% Expenditure Start 1 June 2021 1 Month Construction Draw Assumptions Draw Percent 100% Draw Rate 4% Annually Draw Period 1 Month Draw Treatment Accrued and Capitalized Draw Limit $72,000,000.00 Draw Points.5 Points Permanent Loan Assumptions Loan Amount 100% of Draw Loan Balance Loan Interest Rate 4.5% Annually Original Loan Period 30 Years Loan Origination Date 1 June 2022 Loan Type Monthly Payments, Amortizing Loan Points Charged.5 Points, Amortized over Loan Life Market Rate Apartments Revenue Assumptions Annual Revenue (152,568 SqFt @ $2.66/SqFt/Month) $4,869,971.00 Revenue Start Date 1 July 2021 Revenue Period 1 Year Revenue Growth Method Annual at the Inflation Rate Vacancy Factor 50% 6

Analysis Assumptions Report Roosevelt Apartments Market Rate Apartments Continued Revenue Assumptions Annual Revenue Continuation Revenue Start Date Continuation Revenue Period 10 Years Revenue Growth Method Annual at the Inflation Rate Vacancy Factor 5% MFTE Apartments Revenue Assumptions Annual Revenue (38,142 SqFt @ $1.97/SqFt/Month) $901,677.00 Revenue Start Date 1 July 2021 Revenue Period 1 Year Revenue Growth Method Annual at the Inflation Rate Vacancy Factor 50% MFTE Apartments Continued Revenue Assumptions Annual Revenue Continuation Revenue Start Date Continuation Revenue Period 10 Years Revenue Growth Method Annual at the Inflation Rate Vacancy Factor 5% Residential Parking Revenue Assumptions Annual Revenue (277 SqFt @ $125.00/SqFt/Month) $415,500.00 Revenue Start Date 1 July 2021 Revenue Period Until Projected Sale Revenue Growth Method Annual at the Inflation Rate Other Revenue Assumptions Annual Revenue (280 Units @ $1,230.00/Unit/Year) $344,400.00 Revenue Start Date 1 July 2021 Revenue Period 1 Year Revenue Growth Method Annual at the Inflation Rate Vacancy Factor 50% Other Revenue Continued Revenue Assumptions Annual Revenue Continuation Revenue Start Date Continuation Revenue Period 10 Years Revenue Growth Method Annual at the Inflation Rate Vacancy Factor 5% 7

Analysis Assumptions Report Roosevelt Apartments Retail Revenue Assumptions Annual Revenue (11,510 SqFt @ $27.00/SqFt/Year) $310,770.00 Revenue Start Date 1 July 2021 Revenue Period Until Projected Sale Revenue Growth Method Annual at the Inflation Rate Vacancy Factor 5% Expense Assumptions Annual Expense (280 Units @ $5,498.00/Unit/Year) $1,539,440.00 Expense Start Date 1 July 2021 Expense Period 10 Years Expense Growth Method Annual at the Inflation Rate 8

Project Cost Summary Roosevelt Apartments Cost Item $/SqFt Total % Total $ Land: Land 40.40 15.94% 14,575,000 Total Land: $40.40 15.94% $14,575,000 Hard Cost: Hard Cost Above Grade 126.06 49.73% 45,478,460 Hard Cost Below Grade 32.59 12.86% 11,757,015 Hard Cost Courtyard 1.52 0.60% 547,500 Retail Tenant Improvements 2.97 1.17% 1,071,351 Hard Cost Contingency 8.16 3.22% 2,942,713 Total Hard Cost: $171.29 67.57% $61,797,039 Soft Cost: A&E 12.05 4.75% 4,347,575 Specialty Consultants 0.85 0.33% 305,000 Testing & Inspections 0.42 0.16% 150,000 Legal 0.06 0.02% 20,000 Off-Sites & Permits Fees 1.39 0.55% 500,000 Lender Legal, Review, Draw 0.19 0.08% 69,000 Marketing Coll, FF&E, LeaseUp 1.66 0.66% 600,000 Lease Commission 0.52 0.20% 186,462 Prop. Tax During Construction 1.54 0.61% 556,271 Builder's Risk Insurance 0.54 0.21% 196,375 Constructioin Management Fee 1.10 0.43% 396,000 Development Fee 5.84 2.31% 2,108,440 Soft Cost Contigency 1.31 0.52% 471,756 Total Soft Cost: $27.46 10.83% $9,906,879 Total Costs before Debt $239.15 94.34% $86,278,918 Plus: Draw Loan Interest & Fees $14.34 5.66% $5,173,930 Total Project Cost $253.49 100.00% $91,452,848 9

Proforma Income Statement Roosevelt Apartments 7 Months 2018 2019 2020 2021 2022 2023 Gross Income Market Rate Apartments $0 $0 $0 $2,434,986 $4,930,846 $5,054,117 MFTE Apartments 0 0 0 450,839 912,948 935,772 Residential Parking 0 0 0 207,750 420,694 431,211 Other Revenue 0 0 0 172,200 348,705 357,423 Retail Revenue 0 0 0 155,385 314,655 322,521 Total Gross Income $0 $0 $0 $3,421,159 $6,927,847 $7,101,043 Less: Vacancy & Credit Loss 0 0 0 1,536,781 1,701,468 333,492 Effective Income $0 $0 $0 $1,884,378 $5,226,379 $6,767,552 Less: Operating Expenses Expense 0 0 0 769,720 1,558,683 1,597,650 Total Operating Expenses $0 $0 $0 $769,720 $1,558,683 $1,597,650 Net Operating Income $0 $0 $0 $1,114,658 $3,667,696 $5,169,901 Less: Debt Service Permanent 0 0 0 0 2,941,914 4,420,161 Total Debt Service $0 $0 $0 $0 $2,941,914 $4,420,161 Net Operating Cash Flow $0 $0 $0 $1,114,658 $725,782 $749,740 Add: Debt Draw & Repay Construction Draw 775,886 1,551,773 39,646,766 25,399,029 (72,547,387) 0 Permanent 0 0 0 0 72,697,341 0 Total Debt Draw & Repay $775,886 $1,551,773 $39,646,766 $25,399,029 $149,954 $0 Less: Capital Spending Land 0 0 14,575,000 0 0 0 Hard Cost Above Grade 0 0 30,318,973 15,159,487 0 0 Hard Cost Below Grade 0 0 7,838,010 3,919,005 0 0 Hard Cost Courtyard 0 0 365,000 182,500 0 0 Retail Tenant Improvements 0 0 714,234 357,117 0 0 Hard Cost Contingency 0 0 0 2,942,713 0 0 A&E 724,596 1,449,192 1,449,192 724,596 0 0 Specialty Consultants 50,833 101,667 101,667 50,833 0 0 Testing & Inspections 0 0 100,000 50,000 0 0 Legal 3,333 6,667 6,667 3,333 0 0 Off-Sites & Permits Fees 83,333 166,667 166,667 83,333 0 0 Lender Legal, Review, Draw 0 0 46,000 23,000 0 0 Marketing Coll, FF&E, LeaseUp 0 0 0 400,000 200,000 0 Lease Commission 0 0 0 108,770 77,693 0 Prop. Tax During Construction 0 0 370,847 185,424 0 0 Builder's Risk Insurance 0 0 130,917 65,458 0 0 Constructioin Management Fee 0 0 264,000 132,000 0 0 Development Fee 0 0 0 2,108,440 0 0 Soft Cost Contigency 0 0 0 471,756 0 0 Total Capital Spending $862,096 $1,724,192 $56,447,173 $26,967,765 $277,693 $0 Cash Flow Before Tax ($86,210) ($172,419) ($16,800,406) ($454,078) $598,043 $749,740 10

Proforma Income Statement Roosevelt Apartments 5.00 Months 2024 2025 2026 2027 2028 Gross Income Market Rate Apartments $5,180,470 $5,309,981 $5,442,731 $5,578,799 $2,353,197 MFTE Apartments 959,166 983,145 1,007,724 1,032,917 435,695 Residential Parking 441,991 453,041 464,367 475,976 200,772 Other Revenue 366,358 375,517 384,905 394,528 166,416 Retail Revenue 330,584 338,849 347,320 356,003 150,166 Total Gross Income $7,278,569 $7,460,533 $7,647,047 $7,838,223 $3,306,246 Less: Vacancy & Credit Loss 341,829 350,375 359,134 368,112 155,274 Effective Income $6,936,740 $7,110,159 $7,287,913 $7,470,111 $3,150,973 Less: Operating Expenses Expense 1,637,591 1,678,531 1,720,494 1,763,507 743,866 Total Operating Expenses $1,637,591 $1,678,531 $1,720,494 $1,763,507 $743,866 Net Operating Income $5,299,149 $5,431,628 $5,567,418 $5,706,604 $2,407,107 Less: Debt Service Permanent 4,420,161 4,420,161 4,420,161 4,420,161 1,841,734 Total Debt Service $4,420,161 $4,420,161 $4,420,161 $4,420,161 $1,841,734 Net Operating Cash Flow $878,988 $1,011,467 $1,147,257 $1,286,443 $565,373 Add: Debt Draw & Repay Construction Draw 0 0 0 0 0 Permanent 0 0 0 0 0 Total Debt Draw & Repay $0 $0 $0 $0 $0 Less: Capital Spending Land 0 0 0 0 0 Hard Cost Above Grade 0 0 0 0 0 Hard Cost Below Grade 0 0 0 0 0 Hard Cost Courtyard 0 0 0 0 0 Retail Tenant Improvements 0 0 0 0 0 Hard Cost Contingency 0 0 0 0 0 A&E 0 0 0 0 0 Specialty Consultants 0 0 0 0 0 Testing & Inspections 0 0 0 0 0 Legal 0 0 0 0 0 Off-Sites & Permits Fees 0 0 0 0 0 Lender Legal, Review, Draw 0 0 0 0 0 Marketing Coll, FF&E, LeaseUp 0 0 0 0 0 Lease Commission 0 0 0 0 0 Prop. Tax During Construction 0 0 0 0 0 Builder's Risk Insurance 0 0 0 0 0 Constructioin Management Fee 0 0 0 0 0 Development Fee 0 0 0 0 0 Soft Cost Contigency 0 0 0 0 0 Total Capital Spending $0 $0 $0 $0 $0 Cash Flow Before Tax $878,988 $1,011,467 $1,147,257 $1,286,443 $565,373 11

Proforma Income Statement Roosevelt Apartments 7 Months 2018 2019 2020 2021 2022 2023 Sale Proceeds: Sale Value $0 $0 $0 $24,770,172 $81,504,345 $114,886,699 Less: Sale Costs (1.25%) 0 0 0 309,627 1,018,804 1,436,084 Less: Loan Repayment 0 2,785,002 43,414,834 71,348,285 72,019,632 70,815,726 Sale Proceeds Before Tax 0 (2,785,002) (43,414,834) (46,887,740) 8,465,908 42,634,890 Ratio Analysis: Profitability Ratios Adj. Capitalization Rate 0.00% 0.00% 1.89% 4.26% 5.99% Adj. Cash on Cash Before Tax 0.00% 0.00% 6.53% 3.90% 4.00% Current RoR Before Tax 412.18% 11.36% Risk Ratios Debt Coverage Ratio 1.247 1.170 Breakeven Occupancy 22.5% 65.0% 84.7% Loan Balance/Property Value 288.0% 88.4% 61.6% Assumption Ratios NOI/Property Value 4.50% 4.50% 4.50% Gross Income Multiple 7.24 11.76 16.18 Operating Expense Ratio 22.5% 22.5% 22.5% Analysis Measures: IRR Before Debt 11.5% IRR Before Tax 26.9% 12

Proforma Income Statement Roosevelt Apartments 5.00 Months 2024 2025 2026 2027 2028 Sale Proceeds: Sale Value $117,758,867 $120,702,839 $123,720,409 $126,813,420 $128,118,085 Less: Sale Costs (1.25%) 1,471,986 1,508,785 1,546,505 1,585,168 1,601,476 Less: Loan Repayment 69,556,512 68,239,450 66,861,882 65,421,029 64,801,309 Sale Proceeds Before Tax 46,730,370 50,954,604 55,312,022 59,807,223 61,715,300 Ratio Analysis: Profitability Ratios Adj. Capitalization Rate 6.14% 6.30% 6.45% 6.61% 6.70% Adj. Cash on Cash Before Tax 4.69% 5.39% 6.12% 6.86% 7.23% Current RoR Before Tax 10.92% 10.54% 10.20% 5.34% Risk Ratios Debt Coverage Ratio 1.199 1.229 1.260 1.291 1.307 Breakeven Occupancy 83.2% 81.7% 80.3% 78.9% 78.2% Loan Balance/Property Value 59.1% 56.5% 54.0% 51.6% 50.6% Assumption Ratios NOI/Property Value 4.50% 4.50% 4.50% 4.50% 4.51% Gross Income Multiple 16.18 16.18 16.18 16.18 Operating Expense Ratio 22.5% 22.5% 22.5% 22.5% 22.5% Analysis Measures: IRR Before Debt 10.6% 10.1% 9.7% 9.4% 9.4% IRR Before Tax 23.8% 21.6% 20.2% 19.0% 18.6% 13

Sensitivity Analysis Roosevelt Apartments Land Development Cost versus Rate of Return Before Debt Assumption IRR $12,000,000.00 9.9% $13,200,000.00 9.6% $14,400,000.00 9.4% $15,600,000.00 9.2% $16,800,000.00 8.9% 10 8 6 IRR (%) 9.9 9.6 9.4 9.2 8.9 4 2 0 12 13 14 16 17 Land Development Cost ($M) 14

Sensitivity Analysis Roosevelt Apartments Hard Cost Above Grade Development Cost versus Rate of Return Before Debt Assumption IRR $36,000,000.00 11.2% $39,600,000.00 10.5% $43,200,000.00 9.8% $46,800,000.00 9.1% $50,400,000.00 8.5% $54,000,000.00 7.9% 15 10 IRR (%) 5 11.2 10.5 9.8 9.1 8.5 7.9 0 36 40 43 47 50 54 Hard Cost Above Grade Development Cost ($M) 15

Sensitivity Analysis Roosevelt Apartments Net Capitalization Rate at Sale versus Rate of Return Before Debt Assumption IRR 3% Net Cap Rate 14.3% 4% Net Cap Rate 10.8% 5% Net Cap Rate 8.1% 6% Net Cap Rate 6.1% 7% Net Cap Rate 4.5% 8% Net Cap Rate 3.1% 15 10 IRR (%) 14.3 5 10.8 8.1 6.1 4.5 3.1 0 3 4 5 6 7 8 Net Capitalization Rate at Sale (Percent) 16

Sensitivity Analysis Roosevelt Apartments Permanent Loan Interest Rate versus Rate of Return Before Tax Assumption IRR 3% Annually 20.6% 4% Annually 19.2% 5% Annually 17.9% 6% Annually 16.5% 7% Annually 15.0% 8% Annually 13.4% 25 20 15 IRR (%) 10 20.6 19.2 17.9 16.5 15.0 13.4 5 0 3 4 5 6 7 8 Permanent Loan Interest Rate (Percent) 17

Sensitivity Analysis Roosevelt Apartments Market Rate Apartments Annual Revenue versus Rate of Return Before Debt Assumption IRR $3,900,000.00 6.1% $4,290,000.00 7.5% $4,680,000.00 8.8% $5,070,000.00 10.0% $5,460,000.00 11.1% 15 10 IRR (%) 5 8.8 10.0 11.1 7.5 6.1 0 3.90 4.29 4.68 5.07 5.46 Market Rate Apartments Annual Revenue ($M) 18

Risk Analysis Roosevelt Apartments Risk Analysis Assumption Lowest Likely Highest Net Capitalization Rate at Sale 3% Net Cap Rate 4.5% Net Cap Rate 6% Net Cap Rate Hard Cost Above Grade Development Cost $40,000,000.00 $45,478,459.80 $50,000,000.00 Permanent Loan Interest Rate 3% Annually 4.5% Annually 6% Annually Market Rate Apartments Annual Revenue $4,000,000.00 $4,869,971.00 $5,900,000.00 Expense Annual Expense $1,200,000.00 $1,539,440.00 $1,800,000.00 8 6 Probability (%) 4 7.7 7.2 7.5 7.4 2 6.7 6.3 6.4 6.2 5.3 4.6 4.0 4.3 3.8 3.4 3.4 2.7 2.4 1.9 1.7 1.7 0 0.0 0.0 0.0 0.2 0.1 0.2 0.4 0.7 0.8 1.1 <0 <2 <4 <6 <8 <10 <12 <14 <16 <18 <20 <22 <24 <26 <28 <30 <32 <34 <1 <3 <5 <7 <9 <11 <13 <15 <17 <19 <21 <23 <25 <27 <29 <31 <33 0.9 0.6 0.2 0.0 0.0 Rate of Return Before Tax Average IRR 19.1% Standard Deviation 5.3% Lowest IRR 0.0% Highest IRR 33.6% 19

planease Ratio and Measure Definitions Profitability Ratios Capitalization Rate is Net Operating Income divided by the Price of Property at Acquisition. Adj Capitalization Rate is Net Operating Income divided by the Price of Property at Acquisition adjusted for additional investments and dispositions made since acquisition. Cash on Cash Before Tax is Net Operating Cash Flow divided by Initial Equity. Adj Cash on Cash Before Tax is Net Operating Cash Flow divided by Initial Equity adjusted both for additional investments and dispositions made since acquisition, and for additional loans and loan repayments since acquisition. Cash on Cash After Tax is Net Operating Cash Flow less Taxes Due divided by Initial Equity. Adj Cash on Cash After Tax is Net Operating Cash Flow less Taxes Due divided by Initial Equity adjusted both for additional investments and dispositions made since acquisition, and for additional loans and loan repayments since acquisition. Accounting Rate of Return Before Tax is Net Operating Cash Flow plus Equity Buildup plus Appreciation divided by Initial Equity. Accounting Rate of Return After Tax is Net Operating Cash Flow After Tax plus Equity Buildup plus Appreciation divided by Initial Equity. Current Rate of Return Before Tax is Net Operating Cash Flow plus the year's increase in Sale Proceeds Before Tax divided by beginning Sale Proceeds Before Tax. This ratio measures the annual percentage increase in the current invested capital, and is useful for deciding when to sell or refinance when you are not concerned with tax (such as in an exchange). Current Rate of Return After Tax is Net Operating Cash Flow After Tax plus the year's increase in Sale Proceeds After Tax divided by beginning Sale Proceeds After Tax. This ratio measures the annual percentage increase in the current invested capital, and is useful for deciding when to sell or refinance when the transaction will be taxed. Risk Ratios Debt Coverage Ratio is the Net Operating Income divided by Debt Service, measuring the margin of safety for the lender in assuring that money will be available to service his loan. 20

planease Ratio and Measure Definitions Breakeven Occupancy is the Total Operating Expenses plus Debt Service all divided by Total Gross Income, expressing the percentage occupancy necessary to pay for the expenses and debt service. Loan Balance/Property Value is the Loan Repayment amount divided by the Sale Value (both measured at the beginning of the year). This ratio measures the margin of safety for the lender's principal. Assumption Ratios NOI/Property Value is the Net Operating Income divided by the Sale Value. This ratio is also known as the overall capitalization rate, which tests the assumption for the appreciation of the property. Gross Income Multiple is the Sale Value divided by the Gross Income, also testing the assumption for the appreciation of the property. Operating Expense Ratio is the Total Operating Expenses divided by the Gross Income, which tests the reality of the total expense amount, as well as the expense growth rate. Notice that this ratio is better presented in the Common Size report which shows the same ratio for each of the individual expenses as well as the total. Measures A measure is a number which tells you how attractive the cash flows from the investment are. The measures used in our analyses are the Net Present Value (NPV), Internal Rates of Return (IRR), Modified Internal Rates of Return (MIRR), Accumulation of Wealth (CpA), and Lender Yield. Capital Accumulation (CpA) The Capital Accumulation (CpA) of an investment is defined as the Future Value (at the end of the Holding Period, reinvested at the Reinvestment Rate) of all positive cash flows from an investment, regardless of the invested amount. The CpA, then, measures the amount of money that the investor would end up with at the end of the Holding Period to replace the amount(s) invested. Modified Internal Rates of Return (MIRR) The Modified Internal Rates of Return (MIRR) of an investment is defined as the Present Value Discount Rate that makes the Net Present Value of the Investment equal to zero when all positive future cash flows have been reinvested until the end of the Holding Period at the 21

planease Ratio and Measure Definitions Reinvestment Rate, and all negative future cash flows have been funded at the Acquisition Date at the Safe Rate. You may think of the MIRR as the annual Interest Rate or Yield (compounded annually) that the investment is paying you over the Holding Period. Naturally, the higher the yield, the better the investment. Internal Rate of Return (IRR) The Internal Rate of Return (IRR) of an investment is defined as the Present Value Discount Rate that makes the Net Present Value of the Investment equal to zero. You may think of the IRR as the annual Interest Rate or Yield (compounded annually) that the investment is paying you over the Holding Period. Naturally, the higher the yield, the better the investment. The difference between the MIRR and the IRR is that the MIRR explicitly considers and treats the fact that you would reinvest proceeds from the investment during the Holding Period, whereas the IRR ignores reinvestment. Net Present Value (NPV) The Present Value (at i%) of a future cash flow (cf) to be received n years from today is defined as the amount you would have to deposit today (drawing an i% interest rate compounded yearly) to accumulate cf dollars in n years. The interest rate used in this calculation is called the Present Value Discount Rate. The Net Present Value (NPV) of an investment is the sum of the Present Values of all future cash flows, less the initial amount invested. Lender Yield Lender Yield is the Rate of Return (IRR or MIRR, depending on the Model being used) on the Total Debt Service for the property or investment. It is computed by reversing the sign of the Debt Service (to look at it from the Lenders' perspective where the draw is an outflow and the debt service and repay are inflows) and computing returns as normal on these reversed cash flows. 22